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Creating a collaborative platform for the securities industry

Creating a collaborative platform for the securities industry

Securities,
30 September 2021 | 5 min read

We’re working across the securities industry to solve post-trade challenges, together. Learn how our collaborative platform approach helps you reduce settlement fails, increase operational efficiency and opens opportunities for innovation.

Securities market participants today are confronted with various challenges along the value chain. These include upstream disintermediation, increased competition, regulatory requirements, the emergence of tokenised assets, increasing business costs, cyber threats and evolving customer demands.

Tackling industry-wide challenges of this kind requires scalable industry-wide solutions. That’s why we’re working closely with our community to transform the SWIFT platform through purpose-led innovation and enable increased efficiencies, improved transparency, reduced costs, and better risk management.

Our aim: to help you simplify your post-trade operational complexities and future-proof your business to meet tomorrow’s challenges.

Here are six elements critical to our approach:

Facilitating

1. Facilitating transparent transaction flows

When it comes to reducing settlement fails and their associated costs – a major priority for the securities industry – transparency across the settlement and reconciliation value chain is key. Participants must be able to track and trace transaction movements with ease along the transaction flow.

Global tracking references can help facilitate this process by being easily identified through dynamic securities transaction flows and help improve harmonisation and standardisation of transaction processing. We are working with our community to develop a securities tracking solution that adopts the ISO 23897 Unique Transaction Identifier (UTI), to provide an end-to-end, two-sided, and neutral view of transactions.

With better visibility and enriched data along the value chain, industry players can better manage cost and settlement inefficiencies and facilitate improved transaction intelligence.

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2. Ensuring safe and compliant transactions

Challenged by the ever-evolving risk of cyberattacks, safeguarding the security and privacy of data processed and stored on the platform is a top priority. Built into the foundations of our collaborative platform approach are embedded features such as mandatory security controls required by our Customer Security Programme (CSP).

Equally important is the possibility to efficiently screen transactions against international sanctions lists. As part of our financial crime compliance portfolio, we are working to implement ISIN transaction and list screening services. Not only does this help reduce the risk of non-compliance, but it increases operational efficiency by pre-validating that the information is correct before messages are sent.

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3. Providing choice in communication formats

A variety of formats, protocols and channels exist today to communicate and consume data. And, understandably, financial institutions will want to adopt new standards at their own pace. 

While the platform’s core will be based on the data-rich ISO 20022 standard, participants will be able to choose the communication formats they wish to use when they interact with, consume or provide information to the platform.

At the same time, our shared platform model will enable the industry to collaboratively introduce higher levels of standardisation and harmonisation to operational aspects, including security components, data models, market practices, as well as service level agreements to transaction flows.

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4. Creating an inclusive ecosystem

The platform must be able to host and enable interactions between a diverse range of participants from different market segments. Along with achieving shared efficiencies, our collaborative platform approach aims to provide a holistic offering along the securities flow across the expanding boundaries of financial ecosystems and participants.

The platform creates a collaborative marketplace where incumbents and new entrants can build strategic partnerships across capital market segments. With its interconnected reach, it is also an opportunity for third-party solution providers to tap into the rich data available on the platform and, in return, offer value-added services to the community.

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5. Ease of onboarding

As we continue to enhance our platform, we aim to offer easy to integrate, user-friendly and light implementation requirements through APIs and cloud technologies.

The ability to quickly connect to the platform will help reduce time to market, minimise operational interruptions to existing back-office environments and save on implementation costs.

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6. Future-proofing with innovation

A collaborative post-trade platform functions as a self-sustaining ecosystem and should be dynamic enough to not only alleviate today’s challenges, but keep pace with future innovations.

Our collaborative platform will help financial institutions create value by extending the innovation ecosystem beyond the walls of individual organisations into the wider community. It unlocks opportunities for financial institutions and others to collaborate and introduce meaningful solutions that enhance the effectiveness of the post-trade ecosystem as a whole.

Collaboration further encourages the mutualisation of costs and services on the platform. This is a compelling proposition for non-competitive business operations such as transaction tracking, pre-validation, exception management and screening.

Solving industry challenges together

At the heart of our strategy is the strength of the SWIFT community in realising shared objectives. To find out more about how we are transforming our platform, and how you can get involved, read our report The SWIFT platform for capital markets: Your mission, our vision or contact your SWIFT representative today.

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The SWIFT platform for capital markets: Your mission, our vision
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